HSBC has agreed to pay a significant price for its failure to safeguard Australian customers from scammers, with the banking giant facing an £18.5m penalty (A$24.6m) for 'widespread and systematic failures' in protecting its customers. According to data from ASIC's investigation, HSBC's internal transfer systems were not adequately controlled between May 2023 and May 2024, exposing customers to a heightened risk of unauthorised transactions.
Regulatory findings suggest that despite being aware of the increasing threat posed by impersonation fraud as early as May 2021, HSBC did not implement sufficient measures to prevent scams. The Australian Securities and Investments Commission (ASIC) highlighted tens of millions of dollars in customer losses resulting from HSBC's alleged shortcomings, with customers facing prolonged waits for refunds and compensation.
ASIC Chair Sarah Court has stressed the global significance of this case, noting that it sends a clear message about banks' core responsibility to protect customers from scams. Both ASIC and HSBC will seek approval for the proposed penalty from the Federal Court. In response, HSBC has issued an apology to affected customers and confirmed that it has already paid out around £14m in refunds and compensation.
This latest regulatory action adds to a series of challenges faced by the London-listed lender, following a €268m settlement with France's national prosecution over allegations of assisting foreign investors in evading taxes on dividends. The Bank of England previously fined HSBC £57.4m for failing to protect customers' deposits and imposed a £64m penalty in 2021 for weaknesses in its anti-money laundering controls.